Fortuna beats guidance, reports record production of 5.2 million silver equivalent ounces for 2012 and issues production guidance for 2013

VANCOUVER, Jan. 14, 2013 /PRNewswire/ - Fortuna Silver Mines, Inc. (NYSE: FSM) (TSX: FVI) (BVL: FVI) (Frankfurt:
F4S.F) is pleased to announce 2012 record silver and gold production figures
from its San Jose mine located in Mexico and Caylloma mine located in
Peru.

The company's mining operations performed strongly in 2012 delivering
our sixth consecutive year of silver and gold production growth and
sustained low cash cost per silver ounce. For 2013, Fortuna is
scheduled to produce 4.4 million ounces of silver and 23,300 ounces of
gold or 5.7 million Ag Eq ounces plus significant base metal credits.

Jorge A. Ganoza, President and CEO, commented: "2012 has been our sixth
year of continued record silver and gold production growth highlighted
by the first year anniversary of successful commercial operations at
our San Jose mine. For 2013, we continue to project sustained low cost
silver and gold production expansion driven by the San Jose ramp-up to
be commissioned in early Q3 2013. Fortuna´s strategic objective is to
target an annual production rate of 14 million silver and gold
equivalent ounces by 2016 while maintaining cash costs at its
operations below industry average."

2012 Consolidated Production Highlights

Silver and gold production was 8% and 19% above 2012 production guidance
respectively

Caylloma mine 2013 forecast for zinc and lead production of 25.1 million
pounds and 19.4 million pounds respectively

(*) Cash cost per tonne includes all on-site direct and indirect
production costs, community relations expenses, concentrate
transportation and corporate management fees. It excludes government
royalties and workers participation.

2013 Cash Cost Per Tonne Quarterly Guidance

Mine

Q1(US$/t)

Q2(US$/t)

Q3(US$/t)

Q4(US$/t)

San Jose

76

78

67

65

Caylloma

96

97

95

95

2013 Outlook

San Jose Mine

San Jose plans to process 451,000 tonnes of ore at 186 g/t Ag and 1.60
g/t Au. Capital expenditures for 2013 are estimated to be US$22.0
million. The mill expansion from 1,000 to 1,500 tpd is on track to be
commissioned at the beginning of third quarter.

Major capital items include:

Mine development: US$5.7 million

Plant expansion: US$9.1 million

Tailings dam expansion: US$4.4 million

Caylloma Mine

Caylloma plans to process 464,100 tonnes of ore at 170 g/t Ag and 0.40
g/t Au. Capital expenditures for 2013 are estimated to be US$30.7
million.

Major capital items include:

Mine development: US$7.6 million

Camp infrastructure: US$8.6 million

Tailings dam expansion: US$3.6 million

Power grid: US$4.8 million

The company´s brownfields exploration budget for 2013 is estimated at
US$14.2 million; US$7.5 million will be spent at San Jose and US$6.7
million at Caylloma. A comprehensive update of the 2012 brownfields
exploration program is scheduled to be released in the upcoming weeks.

Qualified Person

Edgard Vilela is an independent Qualified Person for Fortuna Silver
Mines Inc., as defined by National Instrument 43-101, and is
responsible for ensuring that the information contained in this news
release is an accurate summary of the original reports and data
provided to or developed by Fortuna Silver Mines.

Fortuna Silver Mines Inc.

Fortuna is a growth oriented, silver and base metal producer focused on
mining opportunities in Latin America. Our primary assets are the
Caylloma silver mine in Arequipa, Peru and the San Jose silver-gold
mine in Oaxaca, Mexico. The company is selectively pursuing additional
acquisition opportunities throughout the Americas. For more
information, please visit our website at www.fortunasilver.com.

This news release contains forward-looking statements which constitute
"forward-looking information" within the meaning of applicable Canadian
securities legislation and "forward-looking statements" within the
meaning of the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements are
statements that are not historical facts and that are subject to a
variety of risks and uncertainties which could cause actual events or
results to differ materially from those reflected in the
forward-looking statements. When used in this document, the words such
as "anticipates", "believes", "plans", "estimates", "expects",
"forecasts", "targets", "intends", "advance", "projects", "calculates"
and similar expressions are forward-looking statements.

The forward-looking statements are based on an assumed set of economic
conditions and courses of actions, including estimates of future
production levels, expectations regarding mine production costs,
expected trends in mineral prices and statements that describe
Fortuna's future plans, objectives or goals. There is a significant
risk that actual results will vary, perhaps materially, from results
projected depending on such factors as changes in general economic
conditions and financial markets, changes in prices for silver and
other metals, technological and operational hazards in Fortuna's
mining and mine development activities, risks inherent in mineral
exploration, uncertainties inherent in the estimation of mineral
reserves, mineral resources, and metal recoveries, the timing and
availability of financing, governmental and other approvals, political
unrest or instability in countries where Fortuna is active, labor
relations and other risk factors.

Although Fortuna has attempted to identify important factors that could
cause actual results to differ materially from those contained in
forward-looking statements or information, there may be other factors
that cause results to be materially different from those anticipated,
described, estimated, assessed or intended. There can be no assurance
that any forward-looking statements or information will prove to be
accurate as actual results and future events could differ materially
from those anticipated in such statements or information. Accordingly,
readers should not place undue reliance on forward-looking statements
or information.